New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-01-16
UNDERGROUND INSURANCE
MANY WORTHLESS POLICIES IN MAINE.

ALLEGED ILLEGAL METHODS OF AGENTs-Low
PREMIUMS AND LOSSES NEVER PAID.
BosToS JAN ia dispatch from Portland Me-, to The
Globe gives interviews with leading insurance OF tho
State concerning tho system OF underground" insur
once which Is being carried in Maine 1t appears to DO
the general opinion that many hundred thousand dollars
worth OF insurance has been placed with these com
NAMES and that little return may be expected from these
poeies The Portland Board OF Underwriters finally
decided 10 suspend A. Sparrow for violating the in
surance law.
Tho statute Is not clear upon this matter,
hit the Insurance Commissioner has decided that
the license agent carries with 1t the right to do also
brokerage business. large amount OF underground"
insurance has been done In Cumberland and York
Counties and in the State and the suspension
OF Mr. Sparrow had been decided upon to try and put
stop to business Only small amount OF this insur-
ance has taken who have been acquainted
with its doubtful character Nearly all Is held By persons
who have been influenced to take the risks because OF
the low premiums the companies being supposed to be
pefecy sound. The principal companies concerned are
the Fargo OF Dakota the Monarch. of Des Molnes; the
Anglo American OF Washington. and tho Equitable, OF
Paris A. d. Thompson OF Portland has been embaTass-
ed by giving his insurance to OF these companies
He could obtain ample insurance in good ones but on
account OF the dcpre sson in business placed his insu
ance with OF these companies mt the low premiums
offered He gave his for tho premiums and after
his losses occurred learned that tho company
had disappeared and his notes in the hands
OF third party, who has sued him
for tho amount, alleging that they wore
purchased of the company in good faith great many
OF losses in Portland tho last year have been I'M
satisfactory When person has good and bogus policies
on the same property partial loss occurs the bogus
companies reckoned good by tho adsers and the
loss proportional by the companies according to the
OF apparent insurance In this unsatisfactory
losses occur. Many policies in outside companies are
placed steamboats, hotels. sugar retneries
aud other hazardous risks Not oneha Of the
panies legally represented in Portland will touch
mor hotel The Franklin Company, OF Philadelphia, Is
particular that will touch building tho lower
side OF Commercials When man has obtained all the
insurance that he In companies allowed 10 do business
in this state his agent Obliged 10 place any further In
York allows agents to do this Agents handle the out
Is per cent commission from good companies, but Wild
accompanies will pay them 80 or more per cent
G. A. sparrow acknowledged that he had been suspend
cd for violation Of the tariff. lie added:
4" There has been large amount OF business done In
companies not allowed to 10 business In tho state but
from all the information command inside and out
side OF my Office. could not give account OF per cent
Off have not acted as general agent for such com
panlcs was general agent OF the ST. Ncholas, OF New
York for Maine aud New Hampshire aud am now resi-
dent agent for the sterling OF New York with the ghtto
do business throughout the State Because risks have
not been paid Is no sign that the company taking them
was doing a wildcat business"
From Inquiries made elsewhere It appears that Mr.
SparTSdT mas w gfhS' statement that Placing
their risks I'm such companies, he was
acting attorney and not as agent Of the companies
The amount OF insurance In tue state placer IN nhep
ground companies IS estimated "a high as SlOOOoDO,
Sult fcoecon in case of drc on the Ottawa House,
Cushing Island In Portland Harbor which was burned
panies which have not been adjusted The insurance
commissioner Is determined TO break up this business
possible and I'm Interview few days ago stated that
the action OF the Portland Board Of Underwriters In
his directions County Attorney to prosecute Mr..
have also been preferred against other agents in differ
ent o.